ABBOTSFORD, B.C. (CUP) — There is only one proper remedy to what ails Europe, and it is certainly not tripling tuition fees and cutting pensions as David Cameron has done in the U.K. No, it is full fiscal and political union: federalism.
The crisis in Europe has entered even more troubling waters. Silvio Berlusconi, the former prime minister of Italy, recently agreed to step aside on the condition that the government adopt more austerity measures. These reforms were deemed necessary by the myriad of interests in the European Central Bank, the European Commission and the governments of “core Europe” (read: Germany et al.) after the interest rates on Italian government bonds raced toward seven per cent — an incredibly high number for a country that is still solvent. A technocratic government, led by the unelected Mario Monti, a former European Commissioner, has been formed.

Various European and North American media float the idea that this new interim government will calm the markets and allow Italy to continue to borrow as rates decline, thereby holding off complete catastrophe. I am not convinced. Greece has announced its own government of national unity which will also be led by a technocrat rather than an elected politician. The bond vigilantes continue to circle as a complete sovereign default and exit from the Eurozone looms.

Europe now stands at a crossroads. The post-war project of European integration has been, up until this point, a resounding success. Despite the spectre of war between the Warsaw Pact and NATO during the Cold War, Western Europe has been without a major conflict since the end of the Second World War, and that is perhaps the greatest evidence in favour of the ongoing European project. But the series of concentric circles that has, up until now, characterized the European Union are beginning to collapse into one another. Europe has been unable to effectively deal with the series of fiscal calamities that has come its way.

The various solutions proposed up until now have been small potatoes in the very worst way. Bailouts by Germany and further commitments to back-stop Greece, Portugal, Ireland and others have done nothing to solve the crises in any of these countries, and have generally exacerbated the economic calamities that ordinary persons have to deal with — especially unemployment. What we are witnessing right now is the failure of otherwise rational actors to move beyond their petty jealousies and save not just the euro, but the future of the entire European Project. Some European elites have begun to float this idea of federal integration, including the former German foreign minister; however, much more political will is needed for such a drastic — and necessary — solution.

At least amongst the countries of the Eurozone, a federal government with the powers of taxation and a democratic mandate would be able to save all of the countries now under threat from the bond markets. It would be able to set up sane financial institutions or at least modify the existing financial institutions to be sane. It could make the European Central Bank a lender of last resort.

Europe remains at the brink. We will see very quickly whether the politicians and technocrats will be able to stave off economic Armageddon, and in the process we may witness the birth of a truly federal Europe. If we do not, I cannot begin to imagine the consequences.